Page 12 - Texas Franchise Tax Handbook

Calculation of the Tax (2/7)

MARGIN

Franchise tax is based on a taxable

A B entity’s margin. Unless a taxable
entity qualifies and chooses to file

using the EZ computation, the tax
F C base is the taxable entity’s margin and

is computed in one of the following

E D ways:
•total revenue times 70 percent;

•total revenue minus cost of goods
sold (COGS);

•total revenue minus compensation;
or
•total revenue minus $1 million

(effective Jan. 1, 2014).